A VA home loan is a special type of mortgage guaranteed by the U.S. Department of Veterans Affairs (VA), and is available only to qualified borrowers as a part of their military benefits. Created to help veterans access credit and compete in the housing market, VA loans have more lenient credit, down payment and debt-to-income requirements than conventional loans. They also typically offer lower interest rates and have lower closing costs. This makes them a great option for any veteran, but especially for first-time home buyers who may need extra help entering today’s competitive housing market.
VA home loans are guaranteed by a government agency, so lenders know that even if a military borrower defaults, they won’t lose all of the money they lent. The VA promises to pay a specific dollar amount to the lender on behalf of each veteran if they default on a loan, and this is the reassurance lenders need to offer military borrowers credit under the relatively relaxed requirements of a VA loan.
